How Medicare fits in if you're still working
Turning 65 and still working? What that means for your Medicare coverage.
Remember when 65 meant retirement? Well, the big birthday is here and you are still employed. But what does that mean for your healthcare coverage and Medicare?
Before we get into next steps, let’s review two important points:
- If you have already filed for Social Security, you will be automatically enrolled in Medicare A and B when you turn 65. If you are covered by an employer plan (you or your spouse), you can potentially opt out of Part B coverage.
- For almost everyone else, working or not, your Initial Enrollment Period (IEP) begins three months before you turn 65 and ends three months after you turn 65. Medicare will not notify you about this IEP so be proactive in reviewing your options. You may assume that your work plan will exempt you, but Medicare has several regulations and deadlines that affect that decision.
When you turn 65, you need to understand what your current plan covers and how it compares to Medicare’s coverage.
- 1. Contact your benefits administrator or plan provider about your current insurance coverage. Acquire your coverage documentation, and ask questions that will allow you to directly compare your coverage with Medicare options, such as:
-How much does my current plan cost every month?
-How will my plan be affected if I enroll in Medicare?
-What have past employees in my position generally done?
- 2. Familiarize yourself with what Medicare (Parts A, B, C, and D) covers and the costs associated with each (this page can help with that).
- Third, if you’re married, note how the plans differ with spousal coverage. Understand that switching to Medicare could impact your spouse’s coverage.
What are the four parts of Medicare?
Medicare Part A
You have the option to enroll or delay enrollment in Part A, or “Hospital Insurance.” If you are thinking of enrolling, know that it is free for most people and it can pick up many services not covered by your current plan. By enrolling during your IEP, you could eliminate issues with future coverage. If you want to delay Part A coverage, you don’t need to do anything when you turn 65.
Regarding enrollment in Part A: If you have a Health Savings Account (HSA), your employer will likely stop contributing to the HSA plan once you are enrolled in Medicare. Be sure to be proactive and have the conversation with your benefits administrator or plan provider before you turn 65 so you do not run into any unnecessary complications.
Medicare Part B
The size of your employer will determine if you should consider enrolling in Part B, or “Medical Insurance.”
If your employer has 20 or more employees, your employer coverage will remain your primary insurer and you can delay Part B enrollment without penalty or gaps in coverage. If delaying enrollment, you don’t need to do anything when you turn 65. You have 8 months after leaving your employer to enroll in Part B through a Special Enrollment Period (SEP).
If your employer has fewer than 20 employees (19 or less), you should sign up for Part A and Part B when you’re first eligible because Medicare will be your primary insurer, no matter what. This means your employer coverage will become secondary, only picking up what Medicare cannot cover. If you do not enroll in Part B right when you’re eligible during your IEP, there will be a penalty and potential gap in coverage.
Regarding enrollment in Part B: There is a premium associated with enrollment whether it’s during your IEP or delayed enrollment. Your income will determine your premium and is outlined in this link: Part B Enrollment Premiums
What is Medicare Part C and D?
Medicare Part C (Medicare Advantage)
Part C, or Medicare Advantage, is an umbrella plan that includes all the services of Part A, B, and often prescription drugs. Key considerations to know with Medicare Part C if you’re still working include:
- You might be better staying with your employer’s coverage to maintain the same physicians. With this plan, you will be required to choose care providers within restricted networks.
- Medicare Advantage could cause you to automatically forfeit your employer’s plan. Due to this automatic forfeit, you’ll need to meet with your benefits administrator or plan provider prior to making any decisions.
Medicare Part D
Your employer may offer prescription drug coverage, but it must be deemed ‘creditable’ by Medicare. Creditable coverage can be defined as “as good as or better than the coverage provided by Medicare’s prescription drug benefit.” If this does not describe your coverage or your employer does not offer a plan, you will want to enroll as soon as you’re eligible. If you do not, there will be a late fee for enrollment. Note, you cannot buy both a Part C and Part D, however most Part C’s include Part D.
Overall, your current coverage, employer size, and Medicare premiums will help you choose the right plans. There are a lot of decisions to make when you turn 65 so if there’s anything you take away from this article, just know:
- First, you need to contact your benefits administrator or plan provider and get educated on your current coverage. Understand how it will be affected by enrolling in the different parts of Medicare
- To avoid penalties and coverage gaps, you’ll want to enroll in Medicare during your IEP. even while remaining on your employer’s plan. Medicare may not be your primary coverage, depending on the size of your employer and there are standard fees for Part B.
- Lastly, don’t be afraid to ask questions. There are a lot of moving parts but asking questions and being knowledgeable about your choices ahead of time will help you find a plan that best fits your needs.
Need help navigating this process or customizing a plan? Griffin Insurance Solutions is an independent agency that offers plans from 15 different insurers. We understand that each client is a unique individual, and we want to help you find the best plan and the right insurer. We ensure that your options remain flexible so you can use the providers and doctors of your choice. We’ll happily address your questions and concerns and help you find the best plan for you. Contact us today for in-person appointment by email or phone at 919-704-6147 or 800-774-1434.